Tuesday, December 31, 2013

Tax Scam Charity or Corporate Welfare ??: The Taskforce for Global Health is #3 on Forbes charity list (opps)


I was looking for a charity that helps people get jobs.  The only large charity in US who's mission is to help people find jobs is Goodwill Industries. So I made a donation.   I used the Forbes large US charity list to find Goodwill Industries.

Note: In general I believe charities are regressive: they steal tax money from the poor and give to rich charities like operas. 

I then proceeded to review the list a little closer. Goodwill Industries is on the list. #6. OK. Respectable. Then I looked the list over. I recognized almost every name as a well established charity except #3. What the heck is the The Taskforce on Global Health(TFGH) ? Never heard of them. And they are number three. Something is suspicious.

As a US Charity, they are ranked #3 at $1.7 Billion. And they are located in a medium sized house in Decatur, GA at 325 Swanton Way, Decatur, Georgia, close to Emory University. I have been to Decatur.  I have waited to transfer from the bus to Marta there. It is a surprising place to find a charity that gave away $1.7 billion dollars.

When you look at their operating budget, it's only about $30 million dollars. The Taskforce on Global Health receives 100% of it's donations as goods or so-called in-kind donations. The goods never pass though Decatur; other the title. The US pharm companies ship the goods directly from their warehouses to the over seas charities.

When you read about the charity(on Wikipedia and through google), it looks like some Emory University doctors/professors want to develop vaccines for unique/obscure diseases in developing countries. But the program has grown immensely since the start. It has far exceeds it original scope.  And it's seems to be driven by US pharmaceutical companies looking for a tax break.

In summary, what was original a good idea, getting drug companies to donate medicines for under treated diseases in developing countries has expanded into a tax write off or corporate subsidy for $1.7 billion dollars.

There are three other big problems that are immediately apparent

1) Do the donated medicines have actual value in developing countries.  Is a facial acne cream or and ED pill need by some fighting malaria ?

2) What basis are they using to record the donation and reduce their tax bill ?  US pharm prices are the highest in the world while prices overseas for the same drug are regulated.  Do the pharm companies receive the full US cost/selling price for medicines that are worth much less ?

3) Do the medicines have a limited life span ? Most medicines are donated toward the end of their expiration date.  Do they sit in charity warehouses until after they have expired ? Note: While it may be illegal, many medicine retain their efficacy long after expiration.


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Goodwill Industries: The only large US charity dedicated to getting prople jobs


Goodwill Indstries is in the only large charity in the US dedicated to helping people get jobs.  The work on creating jobs, training people for jobs, and getting employers to hire people.

Goodwill Industries

How amazing is that ?  Of the top 50 charities in the United States, only one is dedicated to getting people jobs.

Forbes List of top 50 US Charities

Sadly, it also looks like there is a scam on the list.  Number 3, Taskforce for Global Health, Decatur, GA which received $1.7 billion in donated medicines. Looks like the US pharmaceutial industry is dumping inflated high priced medicines for a tax break.

Friday, December 27, 2013

Ver.Di: German Service Workers Union protests Amazon's policies

We were reading about VER.DI, the German service workers union protest against Amazon not paying the prevailing wage in German warehouses. Amazon calls it's employees logistic workers rather than catalog or internet fulfillment workers and can thus pay a lower wage.

Members of Ver.Di were on hand to picket the Amazon headquarters in December.

Here is the story from Internet Retailer about Amazon's tactic.

Arthur Brooks in the NYT: Work Makes you Happy

A New York Times Opinion by Arthur C. Brooks called "A Formula for Happiness" discusses the contribution work can make toward happineess.  The author believes that happiness is determined by genes, life circumstance and work.

About 48% of your happiness is determine by your inherited traits.

About 40% is short and medium term rewards such as buying stuff, family events, or graduating high school. The effect wears off quickly.

The remaining 12% are discrenary activities that include faith, family, freinds and work.  Friends and family are obvious, but work is the most interesting. Meaningful and fulfilling work can deliver personal happiness and financial reward.

The American Enterprise Institute calls this happiness effect "Earned Success".  The times editorial is light on the AEI philosopy but you can get a bigger dose on YouTube. Arthur Brooks: The secret to happiness.

The video on youtube discusses happiness and the it's AEI pro entrepreneurship (pro business) philosophy. The AEI promotes free enterprise as a "moral goal."

Here is another reseacher, Dan Gilbert talking about synthentic versus real happiness. Ted Talks: Dan Gilbert, the surprising science of happiness.

There are two issues we have with the reseach: 1) The low value given to work as a generator of happiness, 2) second is the twist the American Enterprise Insititue gives the reseach at the end to support their position.

First, we can't believe work contributes only part of the overal all 12% happiness.  For many of us the work is also closely entertwined with self esteem, financial empowerment and health.

Second, the reseach all makes sense up until when the AEI tries to slip in it's economic message.  Work has a value above it's financial return. Work in all forms is valuable: private, public and non-profit.

Thursday, December 26, 2013

Bloomberg: Fraternity Affirmative Action or Meritocracy Not

Fraternity members have their own secret affarmative action program.  Bloomberg has the details in a piece called "Secret Handshakes Greet Frat Brothers on Wall Street". The new film "Wolf of Wall Street" publicizes the male dominated culture of the financial industry.

We have long known networks constitute a form of affirmative action for the powerful and their off spring.

What is most disappointing is how privilage networks are described as meritoracies when so many are excluded.

Sunday, December 22, 2013

InterActiveCorp (owner of BlackPeopleMeet.com) executive fired for racist tweet

InterActiveCorp public relations executive Justine Sacco was fired for making a racist tweet beforing flying to South Africa. IAC is owner of the popular black dating website: BlackPeopleMeet.com. IAC is headed by media executive Barry Diller. IAC is a media congolomerate which owns several promonent brands including...

BlackPeopleMeet.com
Match.com
Vimeo
Dictionary.com
UrbanSpoon
HomeAdvisor
CollegeHumor
Ask.com and About.Com
OKCupid

BlackPeopleMeet.com is the largest African-American dating site. The web site was owned by People Media, Inc before acquisition by IAC. People Media, Inc. Reported total revenues of $1.2 billion in 2009.

BlackPeopleMeet also previously worked with the Steve Harvey morning show to arange on-the-air dates. There is no mention of the Steve Harvey Show on BlackPeopleMeet.com nor is there a mention of BlackPeopleMeet.com on the SteveHarvey.com website. However, the press release contains a reference to http://www.blackpeoplemeet.com/steve-harvey.  The link is no longer active.

Here is an old PR news release on PRNews.com. "#1 Black Dating site, BlackPeopleMeet.com and Steve Harvey Morning show team up to launch Radio Date Segment"


Sunday, December 1, 2013

Pavlina Tchemeva - Government fiscal policy must directly create jobs and promote full employment



Economist Pavlina Tchemeva from Bard College is a long time advocate for full employment. What's interesting is that she believes Keynes was too.  She has said that Keynes original intent on employment was reduced to simply "using fiscal stimulus to increase aggragate demand during a recession." Instead Keynes was advocating something closer to full emploument.

She is also is a critic of "trickle-down" economics saying it's never quite works.

Here is a you tube interview at Institute for New Economic Thinking.

Her web page is here.

She has also published papers on using non-profits to create jobs. Full Employment through Social Entrepreneurship.

Another interesting paper is on creating aggrate demand though bottom up employment: Keyne's approach to Full Employment: Aggregate or Targeted Demand.

October Unemployment Wrap-Up: US adds 204K job, Labor force and Employment down due to government shutdown

The US economy added 204,000 job in October, 2013 

The October jobs report from the BLS showed a surprising "pop" in October. Analysts expected a lower number due to the government shutdown, but it seems to have had no effect. The national unemployment rate was unchanged at 7.3% which means there were 11.3 million unemployed workers out of a potential labor force of 142 million. There were postive revisions in the previous months NFP numbers.

The civilian labor force dropped by -720,000 people while the number of people employed decreased by -735,000 in October, however and estimated 448,000 workers were temporily furloghed from the federal government.  The labor force participation rate was 62.8% and the employment to population ratio was 58.3%.

The private sector added 212,000 jobs while the government lost -8,000 jobs. While the national unemployment rate stayed at 7.3%, the black unemployment rate increased slightly to 13.1%.  There were 4.1 million people classified as long-term unemployed (out of work for 26 weeks or longer).  About 8.0 million people who were underemployed (working part time but wanted full time work). A total of 19.3 million workers were unemployed or underemployed (14.5% of the workforce).

The unemployment rate for women was calculated at 6.4% while the rates for other groups remained largely unchanged: men (7.0%), teenagers (22.2%), whites (6.3%), blacks (13.1%) and Hispanics (9.1%). Black teenage unemployment was 36%.

The Dow Jones Industrial Average jumped on the strong employment number reaching near 16,000.

In political economy news, the nation was distracted by issues with the healthcare.gove web site and JP Morgan reach the largest legal settlement ever recorded ($11B) over selling packaged fraudulet mortgages to investors.

The Big Story

The big story is the record number of people who are dropping out of the labor force. In October,according to the household survey, -720K people left the labor force.  These numbers are still large even after you subtract the 450,000 forloughed government employees. The average for the past 12 months was a decline of -49,000.  Huge numbers of whites and black are no longer participating in the labor force. Hispanic participation was steady by contrast.

Close to  -250K white men , -218K white women, and -122K black men said they were no longer participting in the workforce. A very large decrease. In contrast, an additional 21,000 black women joined the labor force.


Black Unemployment

The black unemployment rate was set at 13.1%. The number of black people holding jobs shrank by -184,000 while the labor force was reduced by -158K  causing a 0.3% increase in the unemployment rate. The 12 month average black unemployment rate was 13.3%

The chart below shows the slow decline in the national unemployment rate(U-3) and the recent flattening of the black unemployment rate at 13.1%. The chart also include an estimate of Black U-6 rate which represents everyone who wants to work or wants more hours if they were available.




Household Survey Details for October

As previously mention, there were huge drops in the labor force and the number of people working.  The total labor force declined by 420,000 people while the number of people working was reduced by -735,000.  

The long-term unemployed (27 weeks or more) was 4.1 million people which represents 36% of the unemployed.  The median duration of unemployment was 16.3  weeks  while the average duration was 36.1 weeks.  

The “work part-time, wants full-time,” rose to 8.1 million.  This is a measure of excess labor in the marketplace. About 2.3 million workers were marginally attached to the labor pool.  They have looked for work in the last 12 months but not in the last four weeks.    The report estimated that there were 815K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.

Both marginally attached and discouraged workers have been flat recently. 

Establishment(Business) Survey Results for February

Non Farm Payroll increased by 204,000 which is well above the 12 month average of 170K jobs created.   All of the private sector growth was in the service sector. Retail trade added 44,000 postions, business services jumped 44,000, healthcare increased by 18K and leisure services jobs jumped 53,000. Government lost -8,000 jobs. Construction added 11,000 while Manufacturing jump 19,000 and Temp Help only 3K.   

Below is a chart of steady job growth which on average is about 170,000 jobs per month for the past year and 204,000 for October. 




Below is a chart of the job gains in the non farm payroll categories. Temp help increased only 3K.



Non-Farm Payroll Revision

There were large upward revisions in the August and September NFP numbers. August shot up by +45K  from +193K to +238K and September went from 148K to 163K and increase of +15K. The job market show little effect from the government shutdown.

The average work week was unchanged to 34.4 hours and average wages added 2 cent in October 2013 to $24.10..

ADP

ADP reported an increase in private payrolls of 130,000 positions for October.  Small business (1-49 headcount) added 37,000 jobs; medium size (50-499) added 13,000 and large companies (500+) increased workers by 81,000.

It is economically unclear which types for firms create the "best" jobs for the overal US economy.

Friday, November 8, 2013

New York Times: Poverty in the United States

Mark R. Rank, a professor of social welfare at Washington University in St. Louis writes an excellent summary of people in poverty in the US.  The story appears in the New York Times on November 2nd, 2013.  The piece is here(NYT). The article is loaded with facts. It refutes many of the misconceptions around people in poverty.

Some of the highight include...

Poverty is much more widespread than people realize.  More than half of all people in the US will experience a year in or near the poverty level. The poverty level is about $11,000 for an individual and $23,000 for a family of four.

The number of people in long term poverty is also small. To paraphrase the story, "People experience a year to two in poverty, then a longer period above the poverty line, then slip back again."

Most people in poverty are white.  About two thirds of people in poverty are white. The figure has remained the same "for several decades"

Finally, the author notes that people in poverty are motivated to work.  They have the same attitudes and behaviors as the rest of the country.

The sad part of Professor Rank's article is that curing poverty requires the will of the people and government which does not seem to care.

NYT: Poverty in America is Mainstream

Saturday, October 12, 2013

MIT's Living Wage Calculator

A professor at MIT, Dr. Amy Glasmeier, has created a website to compute the living wage in any city in the US.  The living wage calculator is here. The site computes a wage required to feed, clothe and house 1 adult and 1 child in that location.  It also calculate the poverty wage and displays the minimum wage.  Finally, the site also displays typical salaries for different job in that location to show which ones earn more than the living wage.

The site as updated in 2012.

Dr. Glasmeier works in the Geography department, has also mapped out poverty in the US. The US poverty maps are here. Very little has changed in applichia and the deep south between 1960 and the year 2000.

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Monday, September 30, 2013

October 1st, 2013 is a great day !!!

Many people may not realize it, but tomorrow maybe the greatest day for social justice in the past / next 20 years. It is a historical day.  It is the day the United States extends health coverage to every Citizen of the United States. Every man, woman and child will have the opportunity to buy health insurance at a reasonable price.  It will take years to cover everyone, but 30 years from now society will look back and wonder what took so long.   Tomorrow is a great day for America. 

Friday, September 13, 2013

Conservatives have been wrong about every major government policy over the last 50 years

The Evil Black Economist was reading a story about the affordable care act(ACA - Obamacare). In the article someone pointed out that conservatives have been wrong about every major public policy over the last 80 years. We immediately thought: that cannot be possible.  So we tried to find a counter example and tried and triedand tried...

Here is what conservatives have been wrong about...

Integrated armed forces
Civil RIghts
The New Deal
Social Security
Medicare
Food Stamp
Unemployment Insurance
Enviromental protection
Food and Drug laws
Minimum Wage
Child labor laws, OSHA, 40 hour work week
Marriage Equality


What they have gotten right...

General support for business and the economy(all adiministrations)
National Highway system(eisenhower)
No Child Left Behind(Bush)
Pubic Safety (all conservatives emphasis public safety, usually overdoing it like stop and frisk or spending too much money on local police when there is no crime)
Counter Terrorism(too much money wasted on contractors and privacy invasion)
Family Values (except Marrige Equality)

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Tuesday, September 10, 2013

Bank of North Dakota: The best state run bank in the United States


The only state run bank in the US is the Bank of North Dakota. It is a well managed, profitable institution operating in the public interest. The bank operates in areas other banks ignore.  It makes student loans, rural loans, affordable housing loans and economic development loans.

Bank of North Dakota

Here is a good summry presentation evaluating the idea of creating a bank in Massechuettes similar to the Bank of North Dakota.


The bank is periodically studied as an example for other states to imitate.  But the proposals never go very fars because of entrenched business interests.

Here is a review paper from the Boston Fed on the possibility of starting a similar bank in Massacheuetts. Here is the formal paper. They also have a nice video presentation on the same topic.

Sunday, September 8, 2013

Biased reporting of study results from Cato Institute: Work versus Welfare Trade-Off



The Cato institute published an update to a 2005 study on financial inventives that may discourage work. The work is actually quite good factually.  It's when the Cato Insititue reports the results that the poblems arise.

The most biased part of the report is to call any government beneift: "Welfare" because it goes to help poor and middle class people. Most of the benefots are not cash benefits but other forms like foods stamps or healthcare.

The Work versue Welfare Trade-Off

The work itself is a pretty good review of the total benefits available to families in proverty.

Friday, August 30, 2013

How to buy black 2013 !!!

Ok, if you read the blog, you know we try to buy Black when ever we can. But there are few black businesses.  So we have developed some other strategies around employing black people, supporting black communities,  supporting progressive causes and treating employee fairly.

If you read Our Black Year, you realize how hard it is to support black business even in a wealthy, segregated black area like Chicago.

I recently had to buy a computer software package (Microsoft Access) for a job I am doing. Obviously, nobody black wrote Microsoft Access and yet I had to have the package.  The going price was $110.  So we can assume the all in cost to Microsoft is about $25.00 (R&D, software development, overhead). Microsoft probably keeps $100 dollars ($75 dollars) profit and flips the office supply store $10 dollars to carry the product.

So, I had to decided where to buy the product and what I would pay.
Here is the prce menu.
Microsoft $110 - Electronic Download
Staples $109
Office Max $109

So, I decided, I would do the next best thing.  I would buy it from the place that employed the most black people.  So that not microsoft.  Instead it's a place like best buy, staples or office depot.

Staples founder has criticized Obama and Staples was run by Bain Capital -- probably internally very conservative.

Meanwhile Office Depot (OD) sponsored lady gaga. OD has a "diversity",a "community involvement," and a women in business" button on it's home page - probably relatively moderate

Office Max - No information found but did merge with office depot. A conservatice strategy that usually reduces competition and lays people off. OM has a "Environmental" button on webpage.  Conservative

So I ended up buying the software from Office Deport.  I then check to see if their is a store near by since a retail business creates more jobs and found one.  So I made the purchase at the local retail store for $110 and taxes.

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Sunday, August 11, 2013

May, 2013 Jobs Report Review

The economy add 175,000 new jobs added in May, 2013

The May jobs report from BLS showed slow, consistant growth in the workforce. The labor market added 175,000 jobs in May.  The private sector added 178,000 jobs while government lost -3,000 jobs. The national unemployment rate stayed at 7.6%, the black unemployment rate stood at 13.5%, and the total unemployed persons was 11.8 million.  There were 4.4 million people classified as long-term unemployed (out of work for 26 weeks or longer and looking). Matching last month, about 7.9 million people were underemployed (working part time but wanted full time work) which is the same as last month. About 19.7 million workers are unemployed or underemployed. That is about 12.6% of the workforce.

The unemployment rate for women declined to 6.5% while the rates for other groups remained unchanged: men (7.2%), teenagers (24.5%), whites (6.7%), blacks (13.5%) and Hispanics (9.1%) were not significantly changed. Black teenage unemployment was 43%.

The number of people working as measured by the labor force participation rate was 63.4%. The employment to population ratio also did not change(58.6%).

The Big Story

On the day the report was released, the Dow Jones Industrial Average broke 15,000 for the first time before sliding back.  Later in the week, the index made a strong move over 15,000 and stayed there. In political news, Alan Kruger, Chairman of the Presidents Council of Economic Advisers issued a standard statement welcoming the news while criticizing the government cuts led by Congress known as the sequester.

Second big story is that no construction or manufacturing jobs were created. One hundrend percent of the new jobs were in the service sector.

Business Employment 

Non Farm Payroll increased by 175,000 which is just above the 12 month average of 170K jobs created.   All of the private sector growth was in the service sector. Retail trade added 28,000 postions, business services jumped 57,000, healthcare increased by 26K and leisure services jobs jumped 43,000. Government lost -3,000 jobs.

Black Unemployment

The black unemployment rate was set at 13.5%. The number of black people holding jobs grew by 35,000 while the labor force grew by 106,000 causing a 0.3% increase in the unemployment rate. The 12 month average black unemployment rate is 13.75%

The chart below shows the slow decline in the national unemployment rate(U-3) and the recent flattening of the black unemployment rate.




Household Survey Details for May

The household data survey reported that the total labor force expanded by 420,000 people while the number of people working expanded by 319,000. 

The long-term unemployed (27 weeks or more) was 4.4 million people which represents 37% of the unemployed.  The median duration of unemployment was 17.3  weeks  while the average duration was 36.9 weeks.  A drop in the mediam duration of unemployment (half above/ half below) means people are finding jobs slightly faster.

The “work part-time, wants full-time,” number stayed 7.9 million.  This is a measure of excess labor in the marketplace. About 2.1 million workers were marginally attached to the labor pool.  They have looked for work in the last 12 months but not in the last four weeks.  It seems as if people are either dropping out of the labor market or finding some work.  The report estimated that there were 780K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.  This statistic has also dropped recently.

There are some small but good signs in the report: the numbers of both marginally attached and discouraged workers have been dropping for several months.


Establishment Survey Results for February

Non-Farm Payrolls rose by 175,000 positions in May. All of the new job growth came in services. The jobs were in business services, temp help, retail trade, healthcare and leisure. Construction added 7,000 while Manufacturing lost -8,000 and government lost -3,000.  

Below is chart of steady job growth which on average is about 170,000 jobs  each month. 




The following chart show the increase in jobs for the month split into different sectors. High wage sectors like construction, manufacturing and federal government had employment decreases during the month.  

Note: Starting this month we are splitting out temporary help workers.  Many temporary help employee are really permenant replacement employees working for shell companies helping large companies reduce pay and benefits.




Non-Farm Payroll Revision

March was revised upwards(+4K)  from +138K to +142K and April was revised downwards(-16K) from +165K to +149K. The total downward revision was -12,000 jobs.

The average work week decreased to 34.5 hours and wages added 1 cent in April 2013.

Note: Reporting the average wage increase is always a jokes because it has not changed on inflation adjusted basis for 30-years.  If anything, it is has gone down.

ADP

ADP reported an increase in private payrolls of 135,000 positions for May.  Small business (1-49 headcount) added 58,000 jobs; medium size (50-499) added 39,000 and large companies (500+) increased workers by 39,000.

The breakdown is important because large business are more productive than small and medium size businesses. Because of the productivity defference, large businesses tend to add fewer jobs and pay more in wages and benefits. However, large businesses, with better systems and processes, also squeeze out small and medium size business who create more jobs and have lower profits, resulting in fewer good jobs in the economy. 

Sunday, August 4, 2013

Fast food company profits could support higher wages

Looknig at the profits for companies in the fast food industry, there seems to be plenty of money to pay workers $15 dollars an hour.  Macdonalds is doing incredibly well as are starbucks and Yum Brands(taco bell, KFC and Pizza Hut). 




Operating surplus for eating and drinking establishments increased by 3%.



Friday, July 26, 2013

Personal reaction to President Obama's speech on the Middle Class Economy


On a personal note,  We find the President's speeches very good but crafted from the same, simple formula. And we are getting a little tired of it. So much of the great rhetoric is gone. It now feels like a market tested, grade school level  campaign speech not a major adress on the economy.  Either he is tired or too much of a politician.

At some point during his speechs, Obama does dip into great speech making. Here is my favorite quote (context: Obama is discussing do nothing to improve the economy as some Republicans propose):

"Social tensions will rise, as various groups fight to hold on to what they have, or start blaming somebody else for why their position isn’t improving.  And the fundamental optimism that’s always propelled us forward will give way to cynicism or nostalgia. And that’s not the vision I have for this country.  It’s not the vision you have for this country.  That’s not the America we know.  That’s not the vision we should be settling for.  That’s not a vision we should be passing on to our children. "

Of course he has said this many times before.

Anyway most of Obama's speechs are very similar to the following:

1) (5 Minutes). Go local: thank those who have invited you. Tell one local joke. Recognize several local people in the crowd who are popular.
2) Start upbeat by discussing great things the US or locals have done in the past.
3) (5 Minutes). Create general unease. Begin to paint the picture of what is wrong and what needs to change in general.
4) (2 Minutes). Let them of the hook: Tell people it's not your fault or their fault. Blame current problems on past decisions: wall street, big banks, prior presidents, congress or foreign competition. Discuss something good done recently.
5) (2-5 Minutes). Change the tone to serious with a "But..." or a "We have more work to do..." or "We can do better.."
6) (10-15 Minutes). Create specific unease: Introduce main theme and specific examples the audience can relate to
8) (10 Minutes). Introduce proposal to fix the problems. Include one specific proposal in each area.
9) (10 Minutes). Circle back with specific benefits if programs go forward and specific evils if they don't.
8) (5 Minutes). The close: Call for support and consensus. Paint larger picture of good vs. evil.
9) (5 Minutes). Close with a historic reference (preferably local) renforcing the correctness of the idea and the need for consensus.
10) Thank you, and God bless the United States of America

Send speech to Valerie Jarett and Michelle Obama for vetting.




Hard work: President Obama's Speech on "A Better Bargin for the Middle Class" at Knox College in Galesburg, Illinois

On July 24, 2013, President Obama gave a major economic speech at Knox College in Galesburg, Illinois.

Here is the text of the President's speech.

What can you say ?  As good journalist you need to first layout the facts and as a blogger you must give your opinion.

Facts

Obama discussed the changing economy and the effect of the changes on the middle class in the United States. He discussed the economic environment that everyone is now aware of.  He reviewed the decline in manufacturing, the growth of the service economy, and flat wage growth.

He talked about the main policies that would help the middle class such as healthcare, expanded education opportunities and support for a secure retirement.

Opinion

The presidents team has realized that the US economy is fundementally a middle class economy. However the middle class has long been disinterested in the US political economy. For the last 30 years, the US middle class had enough material comforts and distractions to not worry about larger issues.    Now, people are faced with a declining living standard not just for their children but themselves.  They are ready to listen.

Obama, is trying to use the opportunity to discuss sound economic and political values that will steer the country for the next 30 years. Some of the principles such as caring for the unemployed, poor, sick or elderly did not connect with an selfish public until enough of them faced a similar situation. Not they are ready to listen.

It's just hard work discussing a compliated, long-term topic with the American People.








Saturday, July 13, 2013

New Jersey tries to raise minimum wage with November ballot initiative


In my state, New Jersey, the minimum wage is only $7.25. In June of 2012, the NJ senate and house voted to increase the NJ minimum wage to $8.50. However, Gov. Christie vetoed the bill in January of 2013. Now the legislature is proposing a constitutional amendment to raise the wage to $8.25 and index it to inflation. The amendment will appear on the November ballot.

A survey show that about 3/4 of the registered voters favored the initiative. NJ.COM has the story here.

Many states are planning initiaitve to raise the minimum wage. The department of labor has a map of the current minimum wage pay rates in the US. The DOL map is here. Some big Northeastern states like NY, NJ, PA and MD pay only the federal minimum wage rate.

Recent research has shown that minimum wage increases are employment neutral to employment positive because the people who receive the minimum wage spend almost 100% of their money. It also has less of an impact on small business since the majority of minimum wage employers are large companies.

Politically, the issue has gotten little attention and is expected to pass easily.  Christine, who has presidential ambitions, will mostly likely ignore the issue or make half-hearted arguments against it, to provide cover against the national Republicans.

The reason we noticed the issue was because of a group called  EPI -- The Employment Policies Institute has been running ads in New Jersey against the increase. NJ.COM has the ad for the group here. The Employment Policies Institue is a front for a convervative public relations company called Berman and Co. who's clients include companies in the low wage food and beverage industry.  You can read about Berman & Co. here and here.

EPI has two web sites opposed to raising the minimum wage.  One called EPI-Online is against raising the minimum wage and health insurance. The second called Minimumwage.com is purely against raising the minimum wage. Both sites have few facts or research based ideas and instead offer the standard convervative ideas on raising the minimum wage.

Gov. Christie refused to sign a bill during the summer of 2012 that would have raised the wage to $8.50. That led to the current ballot measure. It will interesting to see if he takes a stand on the popular issue. Opposing any minimum wage increase has become a test for republicans.

The ballot measure reads:

"Do you approve amending the State Constitution to set a State minimum wage rate of at least $8.25 per hour? The amendment also requires annual increases in that rate if there are annual increases in the cost of living. 
YES 
NO"

Sunday, June 30, 2013

Predistribution: Changing the marketplace to support economic justice


Predistribution

One of the most interesting topics in progressive circles is the concept of restructuring the marketplace to reduce inequality. The idea is called predistribution and comes from Dr. Jacob Hacker at Yale University and others. The idea is a major policy proposal of the UK labor party. Hacker previously co-authored "Winner take all Politics"  in 2010.

Predistribution is the idea of changing the political economy to benefit the poor and middle class before wages and economic rents are earned rather than after they are paid when the government must redistribute income though taxes and subsidies. The idea is to "change the rules of the game" before the game is played.

In our current political economy, nether the Democrats or the Republicans know how to grow stagnating wages (vs. productivity), increase opportunity for the middle class (and the poor ?) and decrease inequality.

The political parties instead fall back of past policies such as: using increased taxes and transfers to reduce inequality (known to work), or reducing government spending and debt to create jobs (policy may work under certain circumstances but does not reduce inequality).  And any proposal to increase taxes does not have wide political support as a large number of people believe they should keep what they earn and do not trust the government to use the money wisely.

Hacker asked why other market democracies have had a small increase in inequality and the US a very large jump in income inequality.  He also researched why the US now ranks near the bottom in economic opportunity for western market democracies. He argues that in the US more than any other country, the rich have captured the rule making process and excluded the middle class and poor.  They have manipulated the rules in the last 30 years to tilt the balance in their favor. Predistribution suggests that a different set of rules should be used.

Here are some examples of predistirbution proposals:

1) Increasing the bargaining power of labor(and perhaps labor unions).
2) Reducing corporate subsidies.
3) Eliminating fees and paperwork on small businesses.
4) Limiting corporate executive pay.
5) Increasing the minimum wage. Access to paid sick leave.
6) Quality public services: childcare, healthcare and pensions.
7) A guarenteed job with a promotion path.
8) Lifetime learning, development or education.

Many of them exist in other political economies like western Europe which have much less inequality.

Hacker wrote about the concept of predistribution in his important May 2011 paper called: The Institutional Foundations of Middle Class Democracy. In the paper, he analysis the current political economy in the US.

The paper was presented as part of publication called: "Priorities for a new political economy:Memos to the left." which collected papers for a conference on progressive governance.

Any here are some background article on predistribution. Tell us what you think.

Institutional Foundations of Middle Class Democracy by Jacob Hacker

How to reinvigorate the Center-Left. Predistribution. in the UK Guardian.

Predistribution and the living standards crisis at the Institute for Government Website.

Finally, BBC analysis radio program has a segment called "Predistribution"

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Senators propose amendment to give Americans a chance at H1-B Visa jobs.

Here is an immigration story that got no coverage.  Senators Sherrod Brown of D-Ohio and Chuck Grassley (R-Iowa) proposed an amendment to the immigration bill that would create a legal requirement that US companies hire American citizens before hiring foreign visa workers of equal qualification.  The amendment would also require companies to pay prevailing wages.

The H1-B Visa program has come under a lot of scrutiny lately because of high unemployment rates during the recession. The top 10 companies using H1-B visas are all outsourcing companies and they take more than 50 percent of the H1-B visa quota.

The H1-B visa program was supposed to be a short term fix for shortages in certain labor categories like software engineering and chemical engineering.  The idea was that these companies face a critical technical bottleneck that was stopping growth and job creation elsewhere.  Instead it has been taken over by the outsourcing industry.  Much the way companies shed cafeteria and maintenance staff during the 1990s as "non-core", they also shed IT staff during 2000s. The outsourcing industry is led by large consulting companies like IBM, Accenture, Infosys and EDS.

The amendment had the opposition from the business community for several reasons: it would raise labor costs of H1-B visa workers, it had enforcement provisions which would create a risk of non-compliance, and it would increase administrative cost.

Senator Sherrod Brown Press Release: Give American Workers a Fair Shot at High Skilled Jobs.

Senator Grassely works to eliminate fraud and abuse in H1-B visa program.

Cleveland Plain Dealer / Cleveland.Com: Sherrod votes Yes. 

The proposal is very much in line with the proposed immigration policy of the Evil Black Economist blog.  The policy is that immigrant must be tied to the general unemployment rate and specific industry need.  Guest worker programs like the H1-B visa program is needed but many companies are abusing the program to lower labor costs.

Second, the H1-B visa program ultimately stunts US long term competitiveness in an important and high paying sector of the economy. The consulting and outsourcing industry had deterred the entry of US workers into tech industry by reducing wages, requiring more experience and specialization and reducing R&D and training.

Thirdly, the reality of improved IT productivity for business is much more complicated. Business has saved much less money than they initially though while IT quality has slipped. Most of the excess profit for IT has instead gone to the large consulting companies and outsourcing firms and their owners and partners. Very little has gone to IT innovation, new IT products or new IT supported processes.

The amendment from senators Grassley and Sherrod is good balance between labor and business interests.  The amendment may appear again when the house of representatives debates immigration reform.

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Saturday, June 22, 2013

Alan Kruger speech on economic changes


Alan, Kruger, who is chairmen of the Council of Economic Advisors, gave a long speech in Clevland, OH on the causes of inequlaity.  You can read the speech here.

The speech uses the metaphor of rock n' roll to explain what has happened to the economy.

Monday, June 17, 2013

Construction and Manufacturing Ratio of Unemployed to Open Positions

In the previous post we looked at just construction unemployment to job openings.  Now we are going to add a series for manufacturing.  The ratio of manufacturing industry unemployment to job openings topped out at around 20 to 1.  That's 20 unemployed manufacturing worker for every one open position.

The analysis come from Hiedi Sheirholz at the Economic Policy Insititute here. The article called, "Unemployed workers still far outnumber the job openings in every major sector," discusses the limited number of job openings in many fields.

The chart below compares the ratio of unemployed workers to the number of open jobs in two industries: Construction and Manufacturing.



Manufacturing's ratio peak was in May 2009.


Sunday, June 16, 2013

April BLS Unemployment Review: Solid Report with great revisions


165,000 new jobs added in April

The April unemployment report was another average growth report recording a net 165,000 new jobs (176,000 private job gains and a loss of -11,000 government job) added to the economy. The report, which was released on  May 3rd, 2013, recorded a 0.1% drop in the national unemployment rate from 7.6% to 7.5%.  The number of total unemployed persons was around 11.7 million of which 4.4 million were long-term unemployed.  An additional 7.9 million people were underemployed (working part time but wanted full time work) so a total of 19.5 million are unemployed or underemployed. That is about 13% of the workforce.

The unemployment rate for women declined to 6.7% while the rates for other groups remained unchanged: men (7.1%), teenagers (24%), whites (6.7%), blacks (13.2%) and Hispanics (9.0%) were unchanged.

The labor force participation rate was 63.6% which is low by historical standards.  The employment to population ration stayed at 58.6%.  The rate reached a peak in 2000 at nearly 65% and as late as 2007 the rate stood at 63%.  If the rate were 63% right now, approximately 10 million more people would be employed !!!  The economy is short 10 million jobs !!!

The Big Story

On the day the report was released, the Dow Jones Industrial Average broke 15,000 for the first time. It later retreated, but based on the employment report, the index made a strong move over 15,000 later in the week. In political news, Alan Kruger, Chairman of the Presidents Council of Economic Advisers issued a standard statement welcoming the news while criticizing the government cuts led by Congress known as the sequester.

The second big story was the positive revisions of NFP payroll data for February 2013 from 268,000 to 332, 000 which is an increase of +64,000 positions and a positive March revision from 88,000 to 138, 000, an increase of 50,000.  The total revision was +114K for the two months.

Unemployment report summary

Non Farm Payroll increased by 165,000 which is just below the 12 month average of 169K jobs created.   There was strong growth in all employment categories except construction, information and federal government. The unemployment rate dropped 0.1% to a calculated 7.5%.

The black unemployment rate was set at 13.2%. The number of black people who held jobs grew by 99,000 while the labor force grew by 93,000 causing a 0.1% drop in the unemployment rate. The 12 month average has be 13.75%

The chart below shows the slow decline in the national unemployment rate and the recent plateau of the black unemployment rate.




Household Survey Results for February

The household data survey reported that the total labor force expanded by 210,000 while the number of people working expanded by 293,000. When the change in workers is greater than the change in the labor force (293K / 210K > 1) the unemployment rate goes down. The household survey is a sample of individual workers and considered less accurate than the establishment survey(business). 

The chart below shows the real black unemployment rate (Black U-6) is stuck around 20% even as US national rate slowly declines.



The long-term unemployed (27 weeks or more) was 4.4 million people which represents 37% of the unemployed.  The median duration of unemployment was 17.8  weeks  while the average duration was 36.9 weeks.  People are finding jobs slightly faster.

The “work part-time, wants full-time,” number was 7.9 million.  These people are considered under employed and would like additional work.  About 2.3 million workers were marginally attached to the labor pool.  They have looked for work in the last 12 months but not in the last four weeks.   And there were 835K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.

There are some small but good signs in the report: the numbers of both marginally attached and discouraged workers have been dropping for several months.


Establishment Survey Results for February

Non-Farm Payrolls rose by 165,000 positions in April with growth coming in business services, education, health care and leisure. Construction was a very strong area of the job growth.  Construction added 48,000 jobs while retail trade added +24,000. Government lost -10,000 jobs. 




The following chart show the huge jump in private jobs which added 165,000 jobs in April. You can see the wide spread growth across all job categories except for construction, information and the federal government.



Non-Farm Payroll Revision

As stated earlier February and March NFP figures were revised upward by +114,000 jobs.

The average work week decreased to 34.4 hours and wages added 4 cent in April 2013.

ADP

ADP reported an increase in private payrolls of 119,000 positions for February.  Small business (1-49 headcount) added 50,000 jobs; medium size (50-499) added 26,000 and large companies (500+) increased workers by 43,000. The breakdown is important because large businesses tend to pay employee more and offer better benefits. 

Saturday, June 15, 2013

Construction Unemployment vs. Job Openings peaked at 70-to-1 during recession winter in 2008


The recession was incredibly tough on construction workers.  At one point during the recession the number of unemployed construction workers was 70 times greater than the number of openings.  It was impossible to find a construction job.

I was looking at another great report from Hiedi Sheirholz at the Economic Policy Insititute here. The article called, "Unemployed workers still far outnumber the job openings in every major sector," discusses the limited number of job openings in many fields.

While the economic environment has improved, we can look back at how tough it was during the recession. And how tough it still is.  The nation has a huge job shortage.

The chart below is the ratio of unemployed construction workers to the number of open construction jobs.


Monday, May 27, 2013

March Monthly Unemployment Review: A disappointing 88,000 new jobs in March


BLS Unemployment Report Review for March

The BLS reported that only 88,000 net new jobs were created in March. which is well below the expected 150,000 average.  The national unemployment rate did not move from 7.6%. The black rate was 13.3%.  Most of the job growth was in temporary help, healthcare and leisure and hospitality. Retail sales employment was down by 25K jobs.

Overall unemployment report summary and reaction

The big story is the 663,000 people who dropped out of the labor force as reported in the household survey.   The drop outs were spread across all demographics categories. The stock market shrugged of the small job increase number and rose slightly.  The chart below shows the slow decline in the national unemployment rate.



Almost every other unemployment statistics were unchanged.

The national unemployment rate dropped 0.1% to 7.6% consistent with the slow growing economy. The Employment to Population ratio dropped to 58.5% and the participation rate was rate 63.3%. Both dropped during the month to record lows.  The low values point to a huge number of people who have dropped out of the labor force.

Household Survey Results for February

The household data survey reported that the total labor force decreased by -496,000 and the number employed dropped by -206,000.  All demographic categories, white, blacks and Hispanic, saw large number of people who self-classified as not in the labor force. 

The black unemployment rate moved down to 13.3%.  The reported black labor force decreased by -115,000 people however 9,000 more black people said they were working.  About 148,000 additional black people said they were not in the labor force. Changes in labor force statistics do not always match.

Total black employment was estimated at 16,068,000 workers.  Black teenage unemployment was 34% versus 23% for whites and 28% for Hispanics. Unemployment rate for Hispanics/Latinos was 9.2% while the rate for whites was 6.7%.

The black unemployment rate has reached a plateau while the national rate continues to decline.


The real black unemployment rate (Black U-6) is stuck around 20% even as US national rate slowly declines.

The long-term unemployed (27 weeks or more) was 4.6 million people which represents 40% of the unemployed.  The median duration of unemployment was 18.1  weeks  while the average duration was 37.1 weeks.  People are taking longer to find jobs.

The “work part-time, wants full-time,” number decrease by about 350,000 people to 7.6 million.  These people are considered under employed and would like additional work.  About 2.3 million workers were marginally attached to the labor pool.  They have looked for work in the last 12 months but not in the last four weeks.   And there were 803K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.


Establishment Survey Results for March

Non-Farm Payrolls rose by only 88,000 jobs in March. The growth came in construction, healthcare, hospitality and temporary help. Retail trade lost 25,000 spots.  Construction was a strong area of the job growth adding 18,000 people to the workforce. The number would have been higher except for a 9000 job reduction in civil engineering category.  Government shrank again losing -7,000 jobs. 


Here is a chart of the changes in Non Farm Payrolls since the start of the recession in 2007.



The following charts show the small change in Non Farm Payrolls in March.


The following chart show tepid growth in all categories. Business Services was pumped up by temporary help increases of 20,000 jobs. One would suspect the some of those works are not real temps but permatemps who have been outsourced.



Non-Farm Payroll Revision

Non-farm payrolls were revised in January upward to +148K from +119K and for February 2013 from +236K to +268K.  The average work week was at 34.6 hours and wages added 1 cent in March.

ADP national employment report

ADP reported an increase in private payrolls of 158,000 positions for March.  Small business (1-49 headcount) added 74,000 jobs; medium size (50-499) added 37,000 and large companies (500+) increased workers by 47,000. The breakdown is important because large businesses tend to pay employee more. 

Sunday, May 26, 2013

The Entrepreneurship Industry: Another annoying down side of US capitalism



There has been an explosion of entrepreneurship programs in the US.  It looks like everyone has some sort of "start-up" program, incubator or resource web-site. It's like everyone is trying to hit the lotto and a who industry has developed to sell people tickets and in some cases even "lucky" numbers.

Here are some examples:

Google has site focused on Entrepreneurship called Google Entrepreneur.
So does the City College of New York but on Facebook. Here is the link. 
There are also website that let you create business model like LeanLaunchLab.Com.

But you have to ask how much real, new value add are they creating and how much are they just stealing from one another. All this talk about entrepreneurship is great but it seems like a lot of "fake" PR with lots of smiling young people talking about "doing" good or "risking it all."

The truth is most businesses fail.

Another difficult truth is that the US economy is really a zero-sum game.  In order for you to get rich, someone else has be lose money or income. Despite what people are sold, money does not come from thin air.  It comes out of other peoples pockets.

And large businesses, especially retail, incredibly efficent at removing that money from other peoples pockets. Big box retailing has grown faster than the GDP for the past 30 years.  They have put department stores and mom and pop retailers out of business.  The competition is strong and vigorous   While average customer incomes are flat for the past 30 years.

So, lets be honest, in order for some business to succeed others must fail.

The real key in any business including small start-ups is a defensible niche; a natural or created monopoly that allows the owner to enjoy surplus profits. That can be the corner delicatessen  the local auto-repair business, a mid level medical instrument manufacturer or Amazon.com. (Ed. Note: It was really hard coming up with a mid-level factory example, they all have been pretty much wiped out)

Wednesday, May 22, 2013

What to do about black unemployment

I would say the real black employment rate on average is about 22%. If you take U-6 and add the difference between the white and black U-3 rate you get 22%. The difference can mostly be traced to educational differences, immigration competition among the poor, geographical differences, different career choices (fewer entrepreneurs) and reduced government employment. The residual is discrimination.

Because of the huge legacy of racial oppression and discrimination, you cannot a conversation about black unemployment. Even the most liberal whites have come to associate blacks with being undeserving. In fact, the defenses go up so fast, that I have stopped writing or discussing "black unemployment" directly. I also use code.   I now always use "hard working poor people" or "former military servicemen" both groups contain large number of poor and minorities.

The problem is that society undervalues a job by social justice standards   Many people equate a job with their wage or the valued added returned to the employer. But a job is much more than that. In our society. A job is freedom, dignity, and respect.  It is a chance to participate in society, to earn a wage, to make friends and socialize with people from different backgrounds. It is also a chance to learn and develop. It is a chance to have pride. Without out a job you are worse than unemployed: you are a loser.

Now what to do ? Three things to start: we need to tilt the economy back to rewarding labor, set a realistic limit on immigration, and have the government (state and local) become the employer of last resort. The way to increase returns to labor are all pretty well known: limit corporate size and market control, encourage unions, increase the minimum wage, and teach and encourage entrepreneurship. Immigration should be a function of the unemployment rate.  And finally, the government should be the employer of last resort. It would be cheaper than the current social safety net.

Sunday, May 12, 2013

Delaware = Cayman Islands North

If you every wonder about the power companies to "rig" the system in their favor, take a look a Delaware.  The state is know as Cayman Islands North. Delaware is a state that benefits from helping companies and individuals avoid state taxes. It also promotes business friendly, "light" regulation.  The state has been used by money-launders and arms smugglers.

Almost all of the financial activities in the state are linked to corporate tax reduction or tax avoidance. There was some back office check processing going on during the 90's and 00's but that has greatly diminished. About 50% of the fortune 500 are incorporated in Delaware. There is little real economic activity going on in Delaware outside of Dupont and Perdue Chickens. Delaware is little natural resources and remained a slave state until emancipation.

Instead what Delaware has done is exploit a loophole in the tax system allowing companies to "shop" for a state jurisdiction for tax purposes. For state tax purposes, companies recognize some their US profits in 0% tax Delaware regardless of where they are earned rather than in high tax NY state. Corporation use this tactic to reduce taxes on royalties and other payment that can be recognized in any jurisdiction.

Though it is small potatoes  Delaware has also benefited greatly from individuals avoiding local sales taxes.  People from Maryland, Pennsylvania and New Jersey drive to Delaware for consumer products like liquor, appliances, flat screen TVs and cars.  This damages state tax coffers resulting in higher taxes for everyone.

To it's credit, Delaware has set-up specialized courts, like the court of chancellory, to hear business cases.

The sad part is that Delaware is really usurped federal power.  And not in a good way like the Pennsylvania Department of Agriculture or California EPA's Air Resources Board. Delaware let corporations avoid taxes and robs other states revenues.

You can read more details in the NYT piece: "How Delaware thrives as a corporate tax haven."

Sunday, May 5, 2013

Economic Reasons are five of the top ten reasons for joining the military


We, at the Evil Black Economis,t have been thinking about guaranteed jobs program with the government as the employer of last resort. So we are looking at the government programs that most closely resemble a jobs programs: the military, homeland security and civilian criminal justice (police, fire, and corrections).  Each of these job classes produces little to no value added in society or contributes to GDP other than through salaries.

We believe these areas, which are really cost avoiders, are perfect examples of government jobs programs.

Here are the top ten reasons to enlist in the armed forces.  This list was taken from a military recruiter on the military.com website. So it boils down to one expert opinion.

Here is the list.  Reason which are economic in nature tagged with an "E".

Education ([E]conomic)
Money (E)
Medical Coverage (E)
Career (E)
Travel and Adventure
Camaraderie
Sense of Direction
Real World Skill (E)
Honor
Other but Military Related - Like the idea, weapons and technology, a challenge, friend or family member is in the service, etc.

Affirmative Action is Everywhere


Affirmative action is everywhere these days and no one has a problem with it when the beneficiaries are US military personnel.  Veterans affirmative action even has quotas. And the public is completely accepting of this type of affirmative action.

 The Whitehouse web site has some new details on the affirmative action program for military personnel and their spouses. The program is called "Joining Forces Employment" is a program to get large corporations to hire veterans. The program includes specific commitments (quotas). Michelle Obama recently announced new hiring commitments from companies at  the Whitehouse.

One bit of good news is that poor people and blacks are over represented in the military.

The Whitehouse story is here.

The Joining Forces website is here.

Here is a great report from the Army called "Blacks in the US Army" that has statistics on black participation in the armed forces.

Military.com reports that 5 of the top 10 reasons for joining the military are economic.


Wednesday, April 10, 2013

February unemployment review: NFP jumps to 236,000 new jobs but all other stats are the same

BLS Unemployment Report Review for February

Ok, so here is a really good lesson in statistics.  The February unemployment report, which was released on  8, 2013, shows a jump of 236,000 jobs.  A huge jump over the from February  increase (119K).  So, we always have to remember the number can fluctuate by 100K up or down and that the number is constantly revised.

So what looks like a great number is in fact a random jump with no supporting indicators. Naturally, you  would expect to see the figure revised downward.  Instead, the figure was revised upward in April to 268,000 new jobs. And January was revised up to 148K. What the heck?

Long story short the unemployment rate (7.7%) and the non farm payroll number (236K), are the headline numbers, but they can randomly bounce around a very large amount.  You really have to look at the other numbers to get a complete picture.


Unemployment report summary and reaction

 Non Farm Payroll jumped by 236,000; a figure that is way above average.  There was strong growth in all employment categories except education and state government. The unemployment rate dropped 0.1% to a calculated 7.7%.  

The chart below shows the slow decline in the national unemployment rate.


The  large increase in payrolls came as unexpected news. The stock market surged on the news.   All other unemployment statistics were unchanged.

The national unemployment rate has reached a plateau around 7.8% with little sign of reduction in a slow moving economy.  The Employment to Population ratio was measured at 58.6%, the lowest since October 1983. The participation rate was rate 63.5% the lowest since June 1979. Both have barely moved in the past year.  The low values point to a huge number of people who have dropped out of the labor force.

Household Survey Results for February

The household data survey reported that the total labor force expanded by 165,000 while the number employed expanded by 170,000.  

The black unemployment rate stayed at 13.8%.  The reported black labor force decreased by 2000 people and -14,000 less black people said they were working.  Black employment was 16,059,000 workers.  Black teenage unemployment was 43% versus 22% for whites and 27% for Hispanics. Unemployment rate for Hispanics/Latinos was 9.6% while the rate for whites was 6.8%.

The black unemployment rate has reached a plateau while the national rate continues to decline.


The chart below shows the real black unemployment rate (Black U-6) stuck around 20% even as US national rate slowly declines.


The long-term unemployed (27 weeks or more) was 4.8 million people which represents 40% of the unemployed.  The median duration of unemployment was 17.8  weeks  while the average duration was 36.9 weeks.  People are finding jobs slightly faster.

The “work part-time, wants full-time,” number was 8.0 million.  These people are considered under employed and would like additional work.  About 2.6 million workers were marginally attached to the labor pool.  They have looked for work in the last 12 months but not in the last four weeks.   And there were 885K discouraged workers (part of marginally attached) who are not looking because they believe there are no jobs for them.


Establishment Survey Results for February

Non-Farm Payrolls rose by 236,000 positions in February.  The growth coming in construction, retail trade, business services, and healthcare. Construction was a very strong area of the job growth.  Construction added 48,000 jobs while retail trade added +24,000. Government lost -10,000 jobs. 




The following chart show the huge jump in private jobs which added 246,000 jobs in February


You can see the wide spread growth across all job categories except for education and state government.


Non-Farm Payroll Revision

Non-farm payrolls were revised in December upward to 219K from 196K and for January 2013 from 157K to 119K. The January revision was the first time we have had a negative revision in 6 months which may indicate a slowing economy.  
The average work week was at 34.5 hours and wages added 4 cent in February.

ADP

 ADP reported an increase in private payrolls of 198,000 positions for February.  Small business (1-49 headcount) added 77,000 jobs; medium size (50-499) added 65,000 and large companies (500+) increased workers by 57,000. The breakdown is important because large businesses tend to pay employee more. 


Sunday, April 7, 2013

White Networks block Blacks from Jobs



Nancy DiTomaso knows how white "networks" keep blacks from job opportunities.  Her book: "The American Non-Dilemma: Racial Inequality without Racism" delves into how whites retain their privileges while behaving in a self-described non-racist manner.

There is a story from Huffington Post here: "Black Unemployment Driven by White's favors for friends."

Nancy DiTomaso has been researching the topic for years.  Here is a great piece from a PBS program called "Race - The power of illusion" produced by California Newsreel in 2003. DiTomaso discusses racial inequality and hiring discrimination.

Race at Work: The realities of Race and Criminal Record in NYC Job Market

Here some old news but I don't want to lose track of it, so I am saving it in a blog post.

Devah Pager and Bruce Western did some great work in 2003 using job testers in NYC.  They used identical testers who were different only by race: black, white and Hispanic.   They then added the variable of a criminal record with a felony conviction.

The testers were choosen for similar background, appearance, and verbal skills.  The were all college graduates but representing themselves as high school diploma holders with solid work experience in the field. The testers were also coached to use similar self presentation styles.  They went to 1470 interviews.

The results were indicative of significant racial discrimination in hiring.

23% of whites were offered a job or a call back
19% of Hispanics a similar positive response
and 13% of black got a good response

A summary report from the NYC commission on human rights is here.

The detailed study by Devah Pager is here.

And here is Devah Pager dissertation which has the original research here.

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